For Immediate Release

 

Chicago, IL – March 17, 2009 – Zacks Equity Research picks AmSurg Corporation (AMSG - Analyst Report) as Bull of the Day and Zimmer Holdings, Inc. (ZMH - Snapshot Report) as Bear of the Day. In addition, the analysts at Zacks Equity Research discuss the latest on Gannett (GCI - Snapshot Report), The New York Times (NYT - Snapshot Report) and PMI Group, Inc. (PMI - Analyst Report).

 

Full analysis of all these stocks is available at: http://at.zacks.com/?id=2678

 

Bull of the Day

AmSurg Corporation (AMSG - Analyst Report) is a leading operator of single-specialty practice-based ambulatory surgery centers (ASCs) in the U.S. The company recently reported net earnings from continuing operations of $12.862M (up 13% y/y) with EPS of $0.40 in-line with consensus estimates.

The quarter was characterized by a solid increase in procedure volume (up 9.5% y/y) despite essentially flat y/y same-store revenues, which reflected the impact of Medicare reimbursement cuts and the weaker economy. Nonetheless, the stock has been under further pressure given uncertainties related to healthcare reform and potential changes to Medicare.

We believe the stock has been oversold and move to a Buy recommendation at current levels. We have valued shares of AmSurg on a forward price/earnings (P/E) basis, as well as in comparison to similar firms in the healthcare facilities sector. Our $20 target price represents a multiple of 12x our FY09 EPS estimate of $1.66.

 

 

Bear of the Day

Zimmer Holdings, Inc. (ZMH - Snapshot Report) is a global leader in the design, development, manufacture and marketing of reconstructive implants, and trauma and related orthopedic surgical products.

We believe the increase in unemployment will reduce the number of insured patients. As a result, procedures may be subject to delays, reducing revenue growth in the near-term.

On the upcoming call, we are listening for whether the stronger dollar will reverse the tailwind revenues have received over the past few years, if efforts to increase financial leverage during the recent credit crisis may have met obstacles, and if efforts to control prices of commodity inputs (futures) may pressure gross margins as prices have since retreated.

 

 

Recent Analysis from the Analyst Blog

 

Gannett Website Fuels Stock Surge

 

Gannett (GCI - Snapshot Report) shares rocketed 14% today after the company reported that online advertising revenue at USA Today, its flagship domestic paper, grew 27% year-over-year in February.

This is the largest online revenue increase among the national newspapers, and is in stark contrast to many, including The New York Times (NYT - Snapshot Report), which began to suffer recession-induced declines in online ad revenues in 4Q08. The Tech section of USATODAY.com drove growth, doubling its unique visitors to 1.9 million.

Newspapers have scrambled to build website operations as readers and advertisers move online. Many are now suffering the consequences of an ad-only business model. Future survival will likely necessitate a fee-based system, whether in the form of subscriptions or micro-payments for mini-subscriptions (columns, blogs, sections, etc.).

 

PMI Upped After 99% Short Return

 

We are upgrading our recommendation on the shares of PMI Group, Inc. (PMI - Analyst Report) to a Hold, as the shares have already yielded more than a 99% return since we recommended them as a Sell in September 2007. At this point, we think that the downside potential is rather limited, and we would advise the investors to book profits on their positions.

PMI reported its 4Q08 and FY08 results before market open today. Net loss from continuing operations was $2.22 per diluted share, driven by losses and loss adjustment expenses (LAE) in the U.S. Mortgage Insurance Operations and PMI Europe, a decrease in premiums earned and higher net realized investment losses.

Consolidated net premiums written for 4Q08 totaled $177.5 million, compared to $203.1 million in the prior-year quarter. The decrease was due primarily to lower levels of new insurance written and premium refunds related to rescissions of insurance previously written.

 

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About the Bull and Bear of the Day

 

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

 

About the Analyst Blog

 

Updated throughout every trading day, the Analyst Blog provides analysis from Zacks Equity Research about the latest news and events impacting stocks and the financial markets.

 

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